2. Waste Management Inc. (NYSE:WM)
Number of Hedge Fund Holders: 67
Waste Management Inc. (NYSE:WM) is North America’s largest provider of waste collection, recycling, and disposal services, catering to residential, commercial, and industrial customers. Based in Houston, Texas, the company operates an extensive network of landfills, recycling centers, and transfer stations, playing a critical role in sustainable waste management. While primarily focused on solid waste, WM is also involved in environmental services, including wastewater treatment and landfill gas-to-energy projects. By integrating advanced technologies and sustainability initiatives, the company aims to reduce environmental impact, enhance recycling efficiency, and support a circular economy, including in the water operations.
Waste Management Inc. (NYSE:WM) is demonstrating strong financial performance with projected 16-17% revenue growth, 15% EBITDA growth, and 17-18% free cash flow growth for 2025. The company’s core solid waste business is showing robust performance with strong price conversion and optimization execution, generating around 7% organic growth. The company has made significant progress in reducing SG&A costs to sub-10% of revenue through technology implementation, discipline, and cultural changes, and has invested $1.4 billion in recycling infrastructure improvements, which has resulted in reduced operating costs and improved productivity through automation.
Waste Management Inc. (NYSE:WM)’s recent acquisition of Stericycle positions it as a leader in medical waste, with doubled synergy targets of $250 million and expectations to reduce SG&A to 15% of revenue over three years. The company achieved 30% margins for the first time in its history in 2024 and expects to approach 50% long-term conversion of EBITDA to free cash flow. Customers are increasingly demanding sustainable and environmentally friendly services, driving demand for WM’s recycling and renewable natural gas offerings, which includes water-related projects.
